Start Of the Day Equity Commetary
Indian Markets to open in the red
Thu May 31, 2012 at 09:02 AM
Markets ended lower on Wednesday ahead of the F&O expiry and Q4 GDP numbers slated for a release on Thursday.
While the BSE Sensex finally closed 126.43pts or 0.77% lower at 16,312.15, the Nifty lost 39.35pts or 0.79% to close at 4,950.75. Broad market indices ended lower as the BSE Midcap and Small Cap indices lost 1.28% and 1.21% respectively.
Market breadth was negative as the A/D ratio was 0.63:1 on the BSE.
NSE cash turnover was Rs.9,051crs. Vs. Rs.8,510crs. in the previous session.
Barring the BSE IT index, all the sectoral indices ended lower. The top losers were the BSE Auto, CD, Realty and Bankex indices. The top gainers from the BSE 30 were Sun Pharma, Maruti, Tata Power and HUL. The top losers were Tata Motors, BHEL, ICICI Bank and DLF.
As per the provisional figures on Wednesday, FIIs were net sellers of Rs.10.7 crores in the cash markets, while they were net buyers of Rs.1088.5 crores in the F&O market. DIIs were net sellers of Rs.182.6 crores in the cash market.
US and European Markets
Stocks fell sharply on Wednesday as worries about Europe's debt crisis, specifically the Spanish banking system, shook investor confidence.
Investors flooded into U.S. Treasuries, raising prices and pushing the yield on the benchmark 10-year note down to a record low of 1.62%.
Dow Jones was down 161 points, or 1.3%, to end at 12,420. S&P 500 sank 19 points, or 1.4%, to 1,313. Nasdaq declined 34 points, or 1.2%, to 2,837.
An index of pending home sales declined to 95.5 in April from 101.1 in March.
European Central Bank issued a statement on Wednesday saying it had not been consulted on the bailout for Bankia, Spain's fourth-largest bank, and that such a recapitalization could not be provided by the ECB and eurozone central banks.
European markets moved sharply lower Wednesday, as Spanish stocks tumbled and bond yields surged after the country's debt was pushed further into junk status late the prior day. Britain's FTSE 100 fell 1.8%, DAX in Germany lost 2% and France's CAC 40 plunged 2.2%.
Barring MTNL, which was up by 1.3% the other Indian ADRs ended in the red. Infosys and Wipro were down by 2.2% and 2.9% respectively. Tata Motors and Dr Reddys fell by 9.9% and 1.7% respectively while ICICI Bank, HDFC Bank and Tata Communications were down by 6.2%, 1.6% and 3.7% respectively.
Latin American Markets
Among the Latin American markets, the Mexican markets were down by 0.2% while the Brazilian markets were down by 1.5%.
The Asian indices are trading in the red today. Shanghai composite and Hang Seng are down by 0.9% and 1.4% respectively. Nikkei and Kospi are trading down by 1.7% and 1.2% respectively while Strait Times and Taiwan are in the red down by 0.6% and 1.2% respectively.
As of IST 8.20 am SGX Nifty is trading down by 43.5 points.
The Euro fell to the lowest level in almost two years against the US Dollar on Wednesday as Spain struggled to rescue its troubled banks, adding to signs the European debt crisis is spreading to the region's larger economies. The euro has depreciated 6.6% against the dollar this month, the most since September.
With US Dollar emerging as a safe haven for global investors getting restive on fresh Eurozone worries, Indian Rupee further lost 57 paise yesterday closing at a new low of 56.24 despite RBI efforts to prop it up.
Among the metals, Nickel lost 3.2%. Copper and Aluminium ended lower by 1.7% and 1.1% respectively while Zinc fell by 1%.
Oil for July delivery lost $2.94 to settle at $87.82 a barrel. Oil prices fell to a 7-month low amid the broad flight from risky assets.
Gold futures for June delivery rose $14.70 to end at $1,563.40 an ounce.
Key events to watch for today
India : GDP (Y-o-Y) (Expected to remain flat at 6.1%)
EU : HICP Flash (Y-o-Y)
France : PPI (M-o-M & Y-o-Y), Consumer Manufactured Goods Consumption (M-o-M & Y-o-Y)
Germany : Retail Sales (M-o-M & Y-o-Y), Unemployment Rate
Italy : CPI (M-o-M & Y-o-Y)
US : Chain Store Sales, ADP Employment Report, Jobless Claims, GDP (Q-o-Q), Chicago PMI, Bloomberg Consumer Comfort Index, EIA Natural Gas Report, EIA Petroleum Status Report
We expect the Indian Markets to open in the red today following weak Asian Market and Global Market cues. However later during the day the market may attempt to rise marginally and than could remain on a flat to negative note for the day. The immediate supports for Nifty stands at 4920 and 4900 levels while the immediate resistance levels are at 5030 and 5075. Among the sectoral indices, Realty, Consumer Durables and Auto appear weak.
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